Icahn to Cook: 'Buy back $150bn of Apple's stock, or tell me why you won't'

Fresh from his flopped attempt to prevent Dell from going private, activist investor Carl Icahn has turned his attention towards Apple, advising CEO Tim Cook to up his stock-buyback plan to a cool $150bn.

Had a cordial dinner with Tim last night. We pushed hard for a 150 billion buyback. We decided to continue dialogue in about three weeks.

"I'm certainly not threatening anything, and I'm not talking about some proxy fight, but I will tell you that on this issue I feel very strongly and I'm not going to go away on it – meaning that we're going to continue this dialog," Icahn said in a CNBC interview on Tuesday.

"And, hey, they may very well say 'Too bad, just forget it', then we have to decide what to do," he said.

To put that $150bn recommendation in some perspective, in its most recent filing with the US Securities and Exchange Commission, Apple reported holding $146.6bn in cash and short-term and long-term marketable securities, and as of Tuesday morning it had a market capitalization of over $433bn.

But Icahn isn't suggesting that Apple drain its reserves to fund the $150bn buyback. "You can borrow money so cheaply today," he said. "A company like Apple, it's going to cost them three billion a year to borrow this money, they're making, y'know, fifty-billion cash flow, and they can buy a stock that they all consider to be [valued] cheaply."

In March 2012, Apple said that it would spend $45bn in a combined dividend and share-repurchase program, and it more than doubled that chunk o' change this April to $100bn.

Not enough, says Icahn, who told CNBC that he holds nearly $2bn worth of shares in Cook's company – a pittance when compared to Apple's market valuation. It's clear, however, that he will use whatever leverage that $2bn gives him to increase the value of his stake through the assistance of a major stock-buyback expenditure, however it's funded.

Icahn – no shrinking violet – is demanding that if Apple rejects his request, he be given the reason why.

"Why wouldn't you do it? It makes no sense not to," he told CNBC. "I want a reason. And the reason can't just be, 'Well, the board decided'. We're not accepting that. We're not going to accept this 'Well, it's business judgment, too bad'. That's complete bull as far as I'm concerned." ®